Cotton weekly: low demand, long-term short trend
Last week, U.S. cotton fell sharply on Thursday due to weak exports. Ice 12-month cotton ended Friday at 62.76 cents / pound, down 1.7% for the week. According to USDA data, as of the week of October 15, the net sales of US cotton export in 2015 / 16 was 21977 tons, an increase of 44% compared with the previous week, but a decrease of 20% compared with the previous four week average. The main export destinations were Mexico, Pakistan Turkey, the import demand of China, a big cotton consumer, was reduced. The worry of weak US cotton export weighed on cotton prices. The weather hype about the damage of Texas rainfall to crops temporarily cooled down, the demand became the focus of the market. When the weekly ice cotton price fell, recovering most of the increase of the previous week, it showed a large upward resistance. It is expected that the pattern will be adjusted in the short term.
Last week, Zheng Mian rebounded a low position, recovering the level of 2002. The main 1601 contract closed at 12050 yuan / ton on Friday, up 95 yuan / ton a week. Due to the sharp fall in the price of the external market, the domestic market rebounded slightly. At present, there is a slight profit in the import within the quota, the loss outside the quota is about 4500 yuan / ton. 5-1 contract trend differentiation, spread to - 315 yuan.
On the spot side, CC index 3128b reported 13006 yuan / ton, down 21 yuan on the same day, 67 yuan lower than the previous week, the difference between the spot price the spot price slightly narrowed. The spot market of cotton continues to present two poles. The price of high-grade cotton is relatively high, the inventory of low-grade cotton is overstocked. The purchase price of seed cotton slightly decreased. The purchase price of white cotton above grade 3 in Hebei Province is 2.9-3 yuan / Jin, 38%. The overall quality requirements are strict, the purchase price of Xinjiang seed cotton is more than 5.58 yuan / kg, which is 0.02-0.03 yuan / kg lower than last week. In some regions, ginners have stopped purchasing. Due to the current deadlock in the seed cotton spot markets, most businesses believe that the market is unbroken will be improved after the market further deteriorates.
In the downstream, in September 2015, China's purchasing managers' index (PMI) in the cotton textile industry was 42.0%, down 6.6 percentage points the previous month, fell again after a brief recovery last month. This year's "golden nine silver ten" is fleeting, the industry's overall production marketing situation appears weak, the raw material market is in a slump, the confidence that textile enterprises just want to pick up has been hit again. Yarn prices were stable slightly down, with little volume. The price index of 32 domestic ordinary combed yarns is 20485 yuan / ton, down 60 yuan / ton, the price index of 40 combed yarns is 25120 yuan / ton, down 100 yuan / ton. In the near future, due to the cold weather, the demand for medium high count yarn is gradually reduced, the manufacturer may reduce the price to clear the stock. The spot trading volume of pure cotton grey fabric market is increasing, the price of customers is generally depressed, the delivery of conventional combed varieties is slightly increased, the quotation of some specifications of full cotton fabric still has a downward trend, the export demand is strong. In terms of substitutes, the price of polyester is 6860 yuan / ton, a slight decrease of 10 yuan / ton a week, the price of viscose staple fiber is 14580 yuan / ton, an increase of 70 yuan / ton.
To sum up, the downstream demand is still low, domestic foreign cotton prices are under pressure, the long-term trend is still short. In operation, we can pay attention to the arbitrage of buying, selling selling. On the one hand, the market generally expects that the selling storage will be after March 2016; on the other hand, the market is now in the new cotton market, there are still high-quality cotton in line with the requirements of textile enterprises, but by May next year, the rest is poor quality cotton, at that time, the current situation of selling cotton will be more difficult, low-cost selling trend.